EXHIBIT 10.14


 


EMPLOYMENT AGREEMENT


 


This Employment Agreement is effective the 1st day of
February, 2004, between South Dakota Soybean Processors, LLC, a South Dakota
limited liability company, and Rodney G. Christianson (“Employee”).


 


THE PARTIES AGREE AS FOLLOWS:


 


1.                                       Definitions.
The following terms shall have these meanings:


 


a.                                       “Affiliate” or
“Affiliates” shall mean any Person who controls, is controlled by, or is under
common control with, either directly or indirectly, or through one or more
intermediaries, the Employer. For purposes of this Agreement, the term
Affiliate shall include Urethane Soy Systems Co. and Minnesota Soybean
Processors Coop.


 


b.                                      “Base Salary”
shall mean Employee’s annual compensation as set forth in paragraph 6 of this
Agreement.


 


c.                                       “Confidential
Information” shall mean any and all information disclosed by Employer or
Affiliate to Employee, whether prior to or during the term of this Agreement,
relating to those matters not generally known to the public or the industry in
which Employer and/or an Affiliate is or may become engaged and which pertain
to the operations, processes, methods, and accumulated experience incidental to
the manufacture, processing, sale, and distribution of Employer’s and/or an
Affiliate’s Products, regardless of whether Employer and/or an Affiliate
provides such information to Employee in tangible form or the information is
retained in the memory of Employee. Confidential Information includes, for
example, and without limitation: (i) sales records, pricing manuals, training
manuals, selling and pricing procedures, and financing methods, (ii) trade
secrets and other know-how regarding businesses, products and services, (iii)
personnel and salary information, including wages, bonuses, commissions, and
fringe benefits, (iv) production and processing procedures, formulae and
systems, (v) vendor and supplier information, (vi) Customer lists and
Prospective Customer Lists including, without limitation, names of contacts,
products and services purchased, quantities purchased, credit histories, timing
of purchases, payment histories, special demands of particular Customers, and
current and anticipated requirements of Customers generally for products or
services, (vii) marketing information, including without limitation, research,
development, testing and customer surveys, and any specifications of any new
products or services under development, and (viii) business projections,
strategic plans, marketing systems and procedures, and inventory procedures and
systems.


 


d.                                      “Control,”
“Controlled by” and “under common control with” shall mean the power, directly
or indirectly, to direct or cause the direction of the management and policies
of a Person whether through the ownership of voting securities or by contract
or otherwise.


 

















 


e.                                       “Customer” shall
mean an individual, business or entity with which Employer or an Affiliate did
business during the two (2) year period preceding the termination of Employee’s
employment as provided in this Agreement.


 


f.                                         “Incentive
Compensation” shall mean compensation paid to Employee as set forth in
paragraph 7 of this Agreement.


 


g.                                      “Person” means an
individual, partnership, limited partnership, limited liability company, trust,
estate, corporation, cooperative, custodian, trustee, executor, administrator,
nominee or entity in a representative capacity.


 


h.                                      “Products” shall
mean all products manufactured and/or sold by Employer or an Affiliate,
including polyurethane, plastics, resins, soybeans, soybean meal, soybean oil
and other soybean products.


 


i.                                          “Prospective
Customer” shall mean a potential customer of Employer or an Affiliate, which
has been contacted by Employer or an Affiliate and for which Employer or an
Affiliate has made a financial investment, such as time, travel, equipment or
material during the two (2) year period preceding the termination of Employee’s
employment as provided in this Agreement.


 


2.                                       Employment.  Employer agrees to employ Employee and
Employee accepts employment upon the terms and conditions set forth in this Agreement.


 


3.                                       Duties
and Review. Employee shall be engaged in full-time employment by Employer
as its Chief Executive Officer and shall devote sufficient time and attention
to the business of Employer, including general management and oversight of
Affiliates, as shall be necessary to complete Employee’s obligations. Employer,
through its Board of Managers, shall have the power to determine the specific
duties to be performed by Employee and the time of performance. Employee shall
undergo performance reviews from time to time during the term of this Agreement
at the request of Employer’s Board of Managers.


 


4.                                       Other
Activities. Employee shall devote substantially all of his working time and
efforts during Employer’s normal business hours to the business of Employer,
including the general management and oversight of Affiliates. Employee shall be
free to invest his assets in a manner that will not require any substantial
services by Employee in the conduct of the business of the entities or in the
management of the properties in which he invests.


 


5.                                       Term.
This Agreement is for a term of four (4) years commencing on the 1st
day of February, 2004, and terminating on the 31st day of January,
2008, unless sooner terminated pursuant to the provisions of this Agreement.


 


6.                                       Base
Salary. For all services to be rendered by Employee pursuant to this
Agreement, Employer agrees to pay Employee compensation at an annual rate of
Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00) until
August 31, 2005, and at an annual rate of Three Hundred Thousand and
No/100 Dollars ($300,000.00) for the remaining term of this Agreement. This
Base Salary shall be paid in periodic installments in accordance with the
Employer’s regular payroll practices. Each installment shall be reduced by
deductions for the


 


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withholding of federal income tax, FICA contributions, and all other
deductions required by law or agreed to by Employee.


 


7.                                       Incentive
Compensation. In addition to the Base Salary, Employee shall be paid a
bonus equal to one-half (1/2) of one percent (1%) of Employer’s net income
before taxes and member distributions on net income up to $5,000,000.00, or if
the net income exceeds $5,000,000.00, Employee shall be paid a bonus equal to
one percent (1%) of Employer’s net income. Examples: $4,386,000.0 net income x
..5% = $21,930.00; or $6,500,000.00 net income x 1% = $65,000.00. This incentive
bonus may be paid directly or deferred at Employee’s option. The calculation of
Employer’s net income shall include the net income of all of Employer’s
subsidiaries for which combined and audited financial statements must be
prepared for GAAP (“Generally Accepted Accounting Principles”) purposes. Net
income shall be calculated under the GAAP method of accounting utilized by
Employer for its audited financial statements and shall exclude any items of
income or expense that would be considered to be extraordinary and not arising
in the ordinary course of business. Such items could include but are not
limited to the following:


 


i.                                          Capital gains
or losses from the sale of marketable securities or other investments of
Employer.


 


ii.                                       Gains or losses
on the sales or dispositions of fixed assets.


 


iii.                                    Insurance proceeds
received by Employer for the loss of property, capital assets, or other assets
of Employer.


 


iv.                                   Investment income
from securities held by Employer, e.g., interest income, dividend income, etc.


 


v.                                      Payment of a
legal settlement, or receipt of monies relating to Employer’s involvement in litigation
or other disputes.


 


Such items shall be determined by Employer’s Financial Audit Committee
and subsequently adjusted out of net income for purposes of the calculation of
this incentive bonus. The incentive bonus shall be paid in full within thirty
(30) days following completion of Employer’s audited financial statements in
the year following the year for which the net income is calculated.


 


8.                                       Holidays
and Vacations. Employee shall be entitled to seven (7) paid holidays: New
Year’s Day, Easter, Memorial Day, Fourth of July, Labor Day, Thanksgiving and
Christmas. Employee shah be entitled to twenty (20) days paid vacation during
each fiscal year of employment. Employee shall take his vacation at such time
or times as shall be approved by Employer’s Board of Managers. Vacation time
shall not be cumulative. Employee shall not be entitled to payment for any
unused vacation at year end or upon termination of this Agreement.


 


9.                                       Benefits.
Employee shall receive the benefits, including participation in insurance
benefits and retirement plans, that are provided to Employer’s employees,
provided Employee meets the qualification provisions of each plan.


 


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10.                                 Life
Insurance. Employer may, in its discretion, purchase or renew insurance on
the life of Employee. Employee agrees to submit to reasonable medical
examinations and otherwise reasonably cooperate with Employer in connection
with obtaining such insurance.


 


11.                                 Expenses.
During the term of this Agreement, Employee shall be entitled to prompt
reimbursement by Employer of all reasonable travel, entertainment, and other
expenses incurred by Employee in accordance with the policies and procedures
established by Employer’s Board of Managers and in the performance of his
duties and responsibilities under this Agreement; provided, that Employee shall
properly account for such expenses and present receipts as required by IRS
guidelines.


 


12.                                 Vehicle.
During the term of this Agreement, Employee shall be provided a vehicle for use
for company business. The type and cost of the vehicle as well as its
replacement date will be determined by Employer’s Board of Managers.


 


13.                                 Termination
and Severance Pay.


 


a.                                       Termination.
This Agreement shall terminate immediately: (i) upon Employee’s death, (ii)
upon Employee becoming disabled, which determination shall be made by
Employer’s Board of Managers on the basis of medical evidence satisfactory to
it, in its sole discretion, that Employee is so mentally or physically disabled
as to be unable to fulfill Employee’s duties and responsibilities and that such
disability is likely to be permanent; (iii) upon written notice from Employer
that Employee’s employment is being terminated for “Cause” as defined in
paragraph 13(c) below; (iv) upon written notice from Employer that Employee’s
employment is being terminated without “Cause” as defined in paragraph 13(c)
below; or (v) upon Employee’s resignation of employment. In the event of
Employee’s termination under this paragraph 13(a), he or his estate shall be
entitled to receive the Base Salary and other benefits to which he is entitled
under this Agreement up to the date of termination. Employee or his estate
shall have no rights pursuant to this Agreement to any benefits or compensation
for any period after the date of termination.


 


b.                                      Severance Pay.
If Employer terminates the employment of Employee for any reason other than as
provided below in this subparagraph b, Employer shall pay Employee a sum equal
to 1.5 times Employee’s Base Salary (at the annual rate then existing under
paragraph 6) calculated for a one year period. Payment shall be made in
eighteen (18) equal monthly installments or as otherwise mutually agreed by the
parties beginning on the first day of the month following termination of
employment. For example, if Employer terminates Employee’s employment without
“Cause” on August 1, 2005, Employee shall be entitled to severance pay of
$375,000.00 ($250,000.00 x 1.5) to be paid in 18 equal monthly installments of
$20,833.33 each. For example, if Employer terminates Employee’s employment
without “Cause” on September 1, 2007, Employee shall be entitled to
severance pay of $450,000.00 ($300,000.00 x 1.5) to be paid in 18 equal monthly
installments of $25,000.00 each. Despite anything in this Agreement to the
contrary, Employee shall not be eligible to receive the severance pay described
in this paragraph 13(b) if: (i) Employee’s employment is terminated due to
Employee’s death; (ii) Employee’s employment is terminated due to Employee’s
disability; (iii) Employee’s


 


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employment is terminated for “Cause”; (iv) Employee voluntarily resigns
his employment with Employer, (v) Employee’s employment is terminated because
Employer has ceased all business activities, become insolvent and/or has filed
a voluntary petition in bankruptcy, or has had filed against it an involuntary
petition in bankruptcy; (vi) Employee is employed in a similar position by a
successor company that has purchased substantially all of the assets of
Employer, or (vii) Employer is merged into another company and Employee is
retained by the surviving company in a similar position.


 


c.                                       For “Cause”
Termination. Justifications for the Employer to terminate Employee’s employment
for “Cause” shall include: (i) Employee’s confession or conviction of theft,
fraud, embezzlement, or any other crime involving dishonesty with respect to
Employer, or any Affiliate, (ii) Employee’s excessive absenteeism (other than
by reason of physical injury, disease, or mental illness) without reasonable
cause, (iii) Employee’s act or omission constituting a material breach of any
provision of this Agreement or any non-compliance with Employee’s obligations
under paragraphs 14, 17 and 18 of this Agreement, (iv) habitual and material
negligence by Employee in the performance of his duties under this Agreement,
(v) abusing, misusing or destroying Employer’s property or the property of
Customers or other employees, (vi) making or publishing false, vicious or
malicious statements concerning Employer, its operations, employees or members
of the Board of Managers, (vii) habitually reporting for work under the
influence of intoxicants or drugs, or (viii) Employee’s intentional violation
of any law directly impacting Employer’s business, including any law
prohibiting discriminatory conduct, or the direction of another employee to
violate any such law. The preceding list is not intended to be exhaustive;
other conduct of similar nature may result in termination of Employee. However,
the results of Employer’s or Affiliates’ operations or any business judgment
made in good faith by Employee shall not constitute an independent basis for
termination of Employee’s employment for Cause under this Agreement.


 


14.                                 Limitation
of Competitive Activities. During the term of Employee’s employment with
Employer and for a period of two (2) years after termination of Employee’s
employment, with or without cause, Employee will not, alone or with others,
directly or indirectly, own or have an interest in another company (except for
an ownership interest not to exceed 2% of the outstanding securities of a
company that is required to report to the United States Securities and Exchange
Commission under the Securities Exchange Act of 1934), work in, plan, or engage
in any employment, consulting, or other business activity, whether or not for
compensation, that is competitive with Employer or its Affiliates within a five
hundred (500) mile radius from Volga, South Dakota. Employee will not engage in
any other activity that conflicts with Employee’s obligations to Employer
during the term of this Agreement. The provisions of this paragraph 14 shall
survive the termination of Employee’s employment under this Agreement for any
reason whatsoever.


 


15.                                 Other
Solicitation and Interference Limitations. For a period of two (2) years
after termination of Employee’s employment, with or without cause, Employee
shall not directly or indirectly solicit or aid in the solicitation of any
Customers or Prospective Customers, and shall not interfere with the
relationship between Employer and its Affiliates, or any of their respective


 


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employees, vendors, or suppliers. Employee agrees not to solicit or
assist others in soliciting any Customers or Prospective Customers, employees,
vendors, or suppliers of Employer and/or its Affiliates, directly or
indirectly, even if participating in a business outside of the five hundred
(500) mile radius from Volga, South Dakota. The provisions of this paragraph 15
shall survive the termination of Employee’s employment under this Agreement for
any reason whatsoever.


 


16.                                 Ownership
of Confidential Information. Employee acknowledges and agrees that all
Confidential Information disclosed to Employee is and remains the exclusive
property of Employer and/or its Affiliates. Employee acknowledges that the
Confidential Information was and will continue to be developed and acquired by
Employer and/or its Affiliates at great effort and expense, is valuable to the
owner thereof and constitutes trade secrets unique to the owner thereof.


 


17.                                 Non-Disclosure
of Confidential Information. Employee shall treat Confidential Information
in a secret and confidential manner. Employee shall comply with Employer’s and
its Affiliates’ procedures for maintaining the confidentiality of Confidential
Information and agrees not to make use of or disclose Confidential Information
without the owner’s written consent, directly or indirectly, for any purpose whatsoever,
to any person or entity outside of the owner’s business, either during the term
of Employee’s employment or after termination of Employee’s employment, whether
with or without cause. The provisions of this paragraph 17 shall survive the
termination of Employee’s employment under this Agreement for any reason
whatsoever.


 


18.                                 Delivery
of Confidential Information and Employer Property. Upon request of Employer
and/or an Affiliate and in any event upon termination of Employee’s employment,
with or without cause, Employee shall promptly deliver to the Employer or any
Affiliate all Confidential Information, including, without limitation, all
originals, copies, summaries or extracts of books, catalogues, sale brochures,
Customer lists, Prospective Customer lists, price lists, employee manuals,
notes, photographs, tape recordings, specifications, operations manuals and all
other documents or tangible materials reflecting or referencing Confidential
Information, as well as all other materials furnished to or acquired by
Employee as a result of or during the course of Employee’s employment. The
provisions of this paragraph 18 shall survive the termination of Employee’s
employment under this Agreement for any reason whatsoever.


 


19.                                 Reasonableness
of Restrictions and Enforcement. Employee acknowledges that he has
carefully read and considered the provisions of this Agreement and, having done
so, agrees that the restrictions and limitations in this Agreement are
reasonable as to geographic scope and duration and are necessary to protect
Employer’s and its Affiliates’ proprietary interests in their respective
Confidential Information and to preserve for Employer and its Affiliates the
competitive advantages necessary for their success.


 


20.                                 Remedies.
Employee acknowledges and agrees that it is impossible to measure in money the
damages which will accrue to Employer and/or its Affiliates if Employee should
breach or is in default of any of Employee’s covenants or representations set
forth in this Agreement, and that Employer and/or its Affiliates would be
irreparably damaged by such breach or default by Employee. Accordingly, if any
action or proceeding is instituted by or on behalf of any of the foregoing to
enforce any term of this Agreement, Employee waives any claim or defense that
Employer and/or its Affiliates have an adequate remedy at law or that


 


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Employer and/or its Affiliates have not been, or are not being,
irreparably injured. The rights and remedies of Employer and/or its Affiliates
pursuant to this paragraph are cumulative and shall not be deemed to exclude
any other right or remedy which Employer and/or its Affiliates may have
pursuant to this Agreement or otherwise, at law or in equity.


 


21.                                 Indemnification.
Employee shall indemnify and hold harmless Employer, its Affiliates, and theft
respective owners, officers, managers, directors, other employees, agents, and
assigns from any and all claims, damages, liabilities, attorneys’ fees and
expenses arising out of Employee’s violation of any of the terms and conditions
of this Agreement.


 


22.                                 Expenses
of Enforcement. If Employee breaches or threatens to breach any of the
covenants described in this Agreement, then, in addition to any of the rights
and remedies which Employer and/or its Affiliates may have against Employee,
Employee will be liable to pay Employer’s court costs and reasonable attorneys’
fees incurred in enforcing this Agreement.


 


23.                                 Termination
of Prior Agreements and Modification. Employee acknowledges that any prior
agreement with Employer as to employment was rightfully terminated at
Employer’s discretion prior to execution of this Agreement. This Agreement
constitutes the entire Agreement between Employer and Employee. It is
independent of and supplants all oral or written agreements entered prior to or
contemporaneously with this Agreement, except for the First Amended and
Restated Deferred Compensation Plan made effective February 1, 2004. This
Agreement may not be modified except by written agreement dated subsequent to
the date of this Agreement and signed by both Employer and Employee.


 


24.                                 Severability.
If any provision of this Agreement shall be held by a court of competent
jurisdiction to be unenforceable or invalid, the remaining provisions will
remain in full force and effect. In the event that any of the restrictions or
limitations contained in paragraphs 14 and 15 of this Agreement are held to
exceed the time or geographic limitations permitted by applicable law, then
such restrictions or limitations shall be deemed to be reformed to the maximum
time and geographic limitations permitted bylaw. If any other provision of this
Agreement is held to be overbroad as written, the provision shall be deemed
amended to narrow its application to the extent necessary to make it
enforceable to the fullest extent allowable.


 


25.                                 Successors
and Assigns. This Agreement is personal to Employee and is not assignable
in whole or in part by Employee without the express written consent of
Employer. Any purported assignment by Employee without Employer’s consent will
constitute a breach for which Employer has the right to terminate this
Agreement.


 


26.                                 Presumptions.
In construing the terms of this Agreement, no presumption shall operate in
either party’s favor as a result of counsel’s role in drafting the Agreement’s
terms or provisions.


 


27.                                 Waiver
of Breach. The waiver by Employer of breach of any covenant of this
Agreement or the failure of Employer to take action against any other employee
for similar breaches on their part, shall not operate or be construed as a
waiver of any subsequent or later breach by Employee. No waiver by Employer
shall be effective unless in writing.


 


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28.                                 Text
Controls. The headings of paragraphs and sections are included solely for
convenience. If a conflict exists between any heading and the text of this
Agreement, the text shall control.


 


29.                                 Governing
Law. All rights and obligations arising out of or relating to this Agreement
shall be governed by and construed in accordance with the laws of the State of
South Dakota.


 


30.                                 Dispute
Resolution. All disputes between Employer and Employee arising out of or
relating to this Agreement and/or Employee’s employment shall be exclusively
and finally resolved through the dispute resolution process set forth in
Exhibit A.


 


IN WITNESS WHEREOF,
the parties have executed this Agreement as of the date first above written.


 


 


	
   

  	
  SOUTH DAKOTA SOYBEAN

  
	
   

  	
  PROCESSORS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Paul Casper

  	
   

  
	
   

  	
   

  	
  Its President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Rodney G. Christianson

  	
   

  
	
   

  	
   

  	
  Rodney G. Christianson

  



 


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EXHIBIT A


 


DISPUTE RESOLUTION PROCESS


 


1.                                       Arbitration.
All disputes between Employer and Employee arising out of or relating to this
Agreement and/or Employee’s employment shall be exclusively and finally
resolved through binding arbitration by a single arbitrator. The arbitrator
shall also exclusively and finally resolve all issues relating to the operation
of this Process, including but not limited to all disputes relating to the
validity or enforceability of this Process, the timeliness of an arbitration
demand made pursuant to subparagraph 1.a.ii, the applicability of this
paragraph to a dispute between Employer and Employee, and the exclusion of
other remedies pursuant to paragraph 3.


 


a.                                       Demand for
Arbitration. Either party to this Agreement may initiate arbitration
pursuant to this paragraph by delivering, by certified mail, a written demand
for arbitration to the other party at such party’s current business address.


 


i.                                          Contents
of Demand. The demand for arbitration shall bear a current date and shall
state the name of the initiating party, a brief description of the matter
sought to be arbitrated, and the amount of damages or other relief sought by
the initiating party.


 


ii.                                       Time for
Demand. A demand for arbitration relating to any claim by Employee or
Employer shall be made within the time within which commencement of legal or
equitable proceedings based on such claim could be made under the South Dakota
statute of limitations or repose applicable to such claim. Any claim not
initiated by a demand for arbitration within the times provided in this
paragraph 1.a.ii shall be deemed waived and forever barred.


 


b.                                      Qualifications
and Appointment of Arbitrator. Unless otherwise agreed by the parties, the
arbitrator shall be an attorney licensed to practice law in the State of South
Dakota and shall have experience in resolving or litigating the type of claim,
dispute or matter at issue in the arbitration. The parties shall mutually agree
upon an arbitrator. If the parties are unable to so agree, each party shall
designate an attorney licensed to practice law in the State of South Dakota and
that is unaffiliated with Employer, Employee, and their respective attorneys,
and such third party attorneys shall mutually agree upon an arbitrator.


 


c.                                       Cash
Undertaking. Within ten (10) days following the appointment of an
arbitrator by the parties or their representatives, each party asserting a
claim or counterclaim in the arbitration shall deposit with the arbitrator a
cash undertaking in the amount of $5,000.00, which undertaking shall be applied
to any costs, fees or expenses awarded against the party pursuant to
subparagraph 1.g.


 


d.                                      Governing Law.
The arbitrator shall resolve all claims solely on the basis of South Dakota
law. The arbitrator shall also resolve all issues relating to the operation of
this Process solely on the basis of South Dakota law, including but not limited
to all disputes identified in paragraph 1 above. The parties shall be permitted
to conduct


 


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discovery pursuant to SDCL §§ 15-6-26 through 15-6-37; all
discovery disputes shall be resolved by the arbitrator pursuant to these
provisions and applicable case law. The arbitrator shall conduct all
arbitration proceedings pursuant to the South Dakota Rules of Evidence,
codified at SDCL Chapters 19-9 through 19-18, and applicable case law.


 


e.                                       Location.
All arbitration proceedings shall take place in Brookings, South Dakota, unless
otherwise agreed by the parties.


 


f.                                         Form of
Award: No Appeal: Entry of Award. The arbitrator shall issue a written
award setting forth the arbitrator’s findings of fact, conclusions of law, decision
and monetary award. Except as otherwise permitted by SDCL Chapter 21-25A, no
party shall appeal to any court an award of an arbitrator issued under this
paragraph l.f, and the decision of the arbitrator shall be the final, binding
and conclusive resolution of the dispute. Any party to the arbitration may
apply to a court of competent jurisdiction for entry or confirmation of the
arbitration award. Notwithstanding the foregoing, the issuance of an award
pursuant to this subparagraph 1.f shall not preclude a party from applying to
the arbitrator for costs, fees and expenses as provided in subparagraph 1.g,
nor shall it preclude the arbitrator from modifying the award to provide for
the recovery of such costs, fees and expenses. Any application for costs, fees
and expenses shall be delivered to the arbitrator within thirty (30) days of
the date of the arbitration award.


 


g.                                      Allocation of
Costs, Fees and Expenses. The arbitrator shall award to the prevailing
party, as determined by the arbitrator pursuant to this subparagraph 1.g, all
costs, fees and expenses relating to the arbitration, including reasonable
expert witness and attorneys’ fees, unless the arbitrator finds a substantial
reason for not doing so, which reason shall be explained in writing by the
arbitrator. As used in this subparagraph, a party that is seeking an
affirmative damage award shall constitute a “prevailing party” only if such
party is awarded damages, exclusive of costs, fees and expenses relating to the
arbitration (including reasonable expert witness and attorneys’ fees), in
excess of the last written settlement demand made by such party. A party
against whom damages are sought shall constitute a “prevailing party” only if
such party is ordered to pay damages, exclusive of costs, fees and expenses
relating to the arbitration (including reasonable expert witness and attorneys’
fees), in an amount less than the last written settlement offer made by such
party. If no party constitutes a prevailing party pursuant to the preceding two
sentences, the arbitrator may award costs, fees and expenses relating to the
arbitration, including reasonable expert witness and attorneys’ fees, in the
arbitrator’s discretion. Where parties are asserting affirmative claims against
one another, any separate written settlement demands or offers made on such
claims shall be combined for purposes of this subparagraph. No written demand
or offer made less than ten (10) days prior to the arbitration hearing shall be
considered for purposes of this subparagraph. All settlement demands or offers
shall be kept confidential and shall not be disclosed to the arbitrator, except
in connection with an application for costs, fees and expenses made pursuant to
this subparagraph and subparagraph 1.f.


 


2.                                       Mediation.
At any time after a demand for arbitration has been made pursuant to paragraph
1.a, any party to the arbitration may request mediation. A mediation shall be
conducted only if all parties to the arbitration consent to mediation.


 


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a.                                       Request for
Mediation. The request for mediation shall be in writing and shall be
delivered by certified mail to the current business address of each
unrepresented party to the arbitration and to counsel of each represented party
to the arbitration. The request shall bear a current date and shall state the
name of the requesting party and a brief description of the matter sought to be
mediated.


 


b.                                      Qualifications
and Appointment of Mediator. Unless otherwise agreed by the parties, the
mediator shall be an attorney licensed to practice law in the State of South
Dakota and shall have experience in resolving or litigating the type of claim,
dispute or matter at issue in the mediation. The parties shall mutually agree
upon a mediator. If the parties are unable to so agree, each party shall
designate an attorney licensed to practice law in the State of South Dakota and
that is unaffiliated with Employer, Employee, and their respective attorneys,
and such third party attorneys shall mutually agree upon a mediator. The
mediator of any dispute submitted to mediation under this paragraph 2 shall not
be the same person serving as arbitrator of such dispute, unless otherwise
agreed by the parties.


 


c.                                       Location.
The mediation shall take place in Brookings, South Dakota, unless otherwise
agreed by the parties.


 


d.                                      Allocation of
Mediation Costs. Costs of the mediation shall be borne equally by the
parties, unless otherwise agreed by the parties.


 


3.                                       Exclusive
Remedy. This Exhibit A contains and shall constitute the sole and exclusive
remedy of the parties with respect to any and all disputes, claims or other
matters arising out of or relating to this Agreement and/or Employee’s
employment. The parties hereby waive any and all other remedial rights with respect
to such disputes, claims or other matters, whether in law or in equity.


 


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